How to get cheap car insurance in America: 10 states with the best prices

When it comes to auto insurance rates, where you live matters. The difference between the highest and lowest average annual premium in the US is $2. CNBC.

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The cost ranking was derived from the Bankrate study from the average total percentage of income spent on car insurance, based on the median income in each state. Since median income varies by tens of thousands of dollars by state, the rating is intended to better reflect the strain on drivers' overall budget.

Using this figure, the average cost of auto insurance in the United States is 2,57% of an American driver's annual income, with an average annual premium of $1 per year.

On the subject: Everything you need to know about auto insurance in the US

Below are the 10 states with the lowest annual auto insurance rates, ranked based on their "true value".

10. Wisconsin

• Average percentage of income spent: 1,87%
• Average annual cost: $1

9. Utah

• Average percentage of income spent: 1,85%
• Average annual cost: $1

8. Idaho

• Average percentage of income spent: 1,68%
• Average annual cost $1

7. Washington

• Average percentage of income spent: 1,60%
• Average annual cost: $1

6. Vermont

• Average percentage of income spent: 1,48%
• Average annual cost: $1

5. New Hampshire

• Average percentage of income spent: 1,47%
• Average annual cost: $1

4. Virginia

• Average percentage of income spent: 1,46%
• Average annual cost: $1

3. Massachusetts

• Average percentage of income spent: 1,45%
• Average annual cost: $1

2. Maine

• Average percentage of income spent: 1,44%
• Average annual cost: $876

1. Hawaii

• Average percentage of income spent: 1,41%
• Average annual cost: $1

The rating reflects many factors that affect auto insurance rates in each state, including age, the car you drive, driving history, credit score (in most states), the length of your commute, and even local weather conditions.

Drivers in Louisiana and Florida spend the largest share of their income on auto insurance, at 5,26% and 4,42%, respectively. These figures are high, because in these states the average income is relatively low compared to other states. Weather may also be a factor, as hurricanes and flooding are common in both states, says Lizzy Nealon, author of the report.

To some extent, other factors also play a role.

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On average, US drivers with excellent credit pay almost $1 less than drivers with bad credit, according to Bankrate, but this amount can vary by state. In California, Hawaii, and Massachusetts, insurers are not allowed to use a credit score to determine rates.

Bad driving also has a wide range of consequences. Drivers who have been in an accident pay an average of $2 per year in the US, but this amount can be much higher depending on where you live. For example, in New York, the average annual rate for drivers involved in accidents is $521.

What can you do to lower your rates?

"Because some of the costs are out of your control, the best way to keep your rates down is to keep your driving habits good and your credit score as high as possible, especially in most states where it's used to determine your auto insurance rate," said Sarah Foster, an analyst at Bankrate. who worked on the study.

It is also worth considering a new policy. Drivers often forget to periodically look for new rates, Foster said, especially if their credit score has improved. But insurance companies don't always adjust their rates before the renewal date, so it's up to drivers to keep track of their policy.

"Even if there's no change in your credit score, it's always a good idea to take a closer look and make sure you're not overpaying for insurance that you could get hundreds of dollars cheaper elsewhere," says Foster. “No one wants to overpay for anything when inflation is at a 40-year high.”

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